Blog outlining massive fraud in the Australian listed investment company (LIC) and broader financial sector

Sunday, 6 July 2014

HFA Holdings Limited and Bernie Madoff

HFA Holdings Limited (HFA.AX) is a revaluation fraud with a long sordid history, including involvement with Bernie Madoff through its US subsidiary. HFA was listed by fraudulent investment scheme MFS Limited (later rebranded as Octaviar), that collapsed in 2008 owing more than $2.7bn, having destroyed the lives of thousands of granny investors. Later the carcass of the fraudulent "cornerstone investor" provided a feeding frenzy for maggot liquidators. The HFA criminals then blamed their woes on "bad publicity".

In 2011, the trustees of Bernie Madoff's defunct business launched lawsuits to claw back funds from investors in feeder funds to the Madoff ponzi. HFA subsidiary Lighthouse Investment Partners LLC was sued for $11,162,251, as shown in this complaint. Having learned their lesson about the dangers of "bad publicity", the HFA criminals suppressed this information from being reported in mainstream Australian media. Australian media just pretended this did not happen, despite it being highly pertinent information for any reasonable person attempting to form a view of the HFA business. In Australia, the criminals decide what information you are allowed to access.

The top 20 shareholders control 90% of HFA and manipulate its share price. Being a listed securities fraud, HFA exhibits the standard pattern of long-term catastrophic shareholder value destruction, interspersed with sharp engineered ramps to benefit insiders. In January 2014, Apollo Global Management announced it was looking to exit its convertible note investment in HFA. HFA was then ramped 30% by the investment cartel, as part of a prearranged deal.

According to ASIC, none of this is market manipulation because market manipulation simply does not exist. ASIC need do nothing about share ramps, because share ramps do not exist.

Section 17.6 on page 35 of the 2013 HFA annual report describes the "relationship between remuneration policy and company performance" with inadvertent humor. The company performance justifying payment of USD$4.6m to its criminal management, taken directly from the remuneration report, is shown below.

But operational performance is entirely irrelevant to HFA's utility as a vehicle for securities fraud. HFA is yet again being used in revaluation fraud targeting granny investors. After the prearranged January 2014 ramp, investment cartel associate IOOF Holdings Limited (IFL.AX) immediately started buying millions of HFA shares at around $0.95. To pay back Apollo, HFA raised $16m at $0.90 by issuing shares to the investment cartel. Since the "market" price of HFA now has been brought to $1.12, millions of dollars in fraudulent unrealized profits have been manufactured, creating vast fees for the fund manager investment cartel controlling HFA's share price. The deliberately pumped HFA shares have been dumped on granny investors, packaged in products issued by IOOF Holdings and other cartel associates.

IOOF Holdings and the rest of the HFA investment cartel are engaged in premeditated securities fraud. What is the real difference between Bernie Madoff and the HFA investment cartel? There is but one: Bernie Madoff is in prison.

G'day doc. Arrived today to revisit your April 24 conman post, to copy the link for passing on (stupidly, did not save a copy first time round). Any chance of getting a copy emailed to malcolm,macdundas.mcintyre1@bigpond.com

Understand if that is not possible. Thanks for your invaluable work.Malcolm

Thanks Doc. Re email: my name is usually attached to anything I put online; and the Google address is little-used. Nominating a Google address also is a reminder, even if only to myself, that there is no true anonymity online anyway because everything is collected for analysis and not just Google's gmail.

Dr, I’ve noticed Fifth Element has finally been suspended from quotation. I guess the regulators must have got nervous about its >3700% move and 82 times book value with negative cash flow from operations last quarter.

Yeah I noticed that, TheForms, I guess FTH was too blatant even for tardy ASIC. Also, between the time that the head honcho of this scheme "invested" at $0.01 and the time of suspension at $7.96, he made almost 800 times his money on paper, turning $200K into $159m.

FTH made the (mining) news in WA. I recently was there helping with some exploration work on a mining tenement.

Whilst there I asked a geologist for his opinion on this stuff. He was most scathing about the costs associated with listing a company on the exchange. Compliance costs can run into the hundreds of thousands per year. With the ASX & accountants etc raking in so much cash, there is no incentive for the ASX to too closely investigate the validity of any companies claims.

It only took several decades of open scamming. The most pertinent part of the article is this: "Mr Featherstone has been photographed socialising with senior serving officers, was endorsed online by a Brisbane inspector and even gave a speech at a recent send-off for a high-ranking Gold Coast officer."

Dr Benway, I have another suspect company for you. YPB, it looks like Nexbis re-birthed. Announces large contract with the Chinese Ministry of Public Security but lacks any specific details. This company has created an Illusion of credibility but if you dig deeper it looks suspicious.